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I am not sure I'd agree that Netflix could've been more profitable if they went with their own DC. I think Netflix does not utilize that much hardware. Their st

I am not sure I'd agree that Netflix could've been more profitable if they went with their own DC. I think Netflix does not utilize that much hardware. Their streaming is on their own CDN, which I heard that are placed directly in the big cable companies' DC. Tracking and storing user profiles and other meta data would not require a huge amount of hardware. I think Netflix also does quite a bit of video encoding and analytics, but these workloads would fit well with EC2.

ChuckMcM 11y ago
That would be the thing right? Clearly they can compute their marginal cost per subscriber, and they know what the lifetime value of a subscriber is, so they budget what to spend on EC2 infrastructure and movies at Sundance and still meet their net income goals. They would also know how much difference it would make if they needed to add or reduce their EC2 footprint. Sadly I don't expect them to share what those costs are. I have always felt that Amazon could, in theory, always out compete with NetFlix with their Amazon Prime Video because they would only have to charge the marginal rate for the hardware. However to date it seems like the content contracts have kept NetFlix on top.